Propane Prices Up 4 Straight! Does Pdh Still Smell Good? How Can Propane Source Polypropylene Benefits Soar Against The Wind?

Saudi Aramco's CP for April 2022 was introduced: propane at US$940/tonne, up US$45/tonne from last month; butane at US$960/tonne, up US$40/tonne from last month. The equivalent CIF cost of propane was around $6,846/mt, and butane around $6,986/mt.

CP published data for March: $895/t for propane and $920/t for butane.

CP published data for February 2022: $775/tonne for propane and $775/tonne for butane.

January 2022 CP published data: propane contract price (CP) US$740/t, butane contract price (CP) US$710/t.

Compared to the January prices, the propane contract price announced by CP in April increased by US$200 per tonne.

Each tonne of propylene produced typically consumes 1.18 tonnes of propane, involving comprehensive costs such as depreciation, fuel power and labour costs. Based on calculations for PDH projects currently in operation, the comprehensive cost per tonne is typically $1,200 to $1,500, with a median value of $1,350 being desirable. Based on the above analysis, the profit per tonne for PDH projects is as follows: profit per tonne of propylene = propylene price per tonne - 1.18 x propane price per tonne - RMB 1,350.

In April, the US dollar price of propane will rise to $940 per tonne, and theoretically, the cost of PDH polypropylene products will rise to around $10,500 per tonne. By the close of business on 31 March, the closing price of the main 2205 polypropylene contract futures was only $8,953 per tonne. Throughout April, PDH polypropylene route companies can imagine the operational difficulties.

Homopolymer polypropylene prices look to "10,000" to sigh

How do propane - propylene - polypropylene companies solve it?

Short process, high yield, low investment and other supply-side advantages have been swallowed up by the high price of raw materials, a long time, propane - propylene - polypropylene business survival how to break? In the face of the uncertainty of the new crown and the continuing high propane prices, a short stoppage of the plant could only be a desperate move.

The big goose and the little crow problem has no direction yet, the shortage of natural gas supply is shouted by all parties, how can propane prices be willing to turn down? Propane - propylene - polypropylene companies are having the hardest time.

Hydrogen resource utilisation?

In the context of low-carbon new energy development, the use of hydrogen resources is becoming the trend of the moment. The development of hydrogen refuelling stations in the Yangtze River Delta and hydrogen buses have increased the use of hydrogen resources, and many companies have entered.

Polypropylene to expand the scale and improve the structure?

Donghua Energy, Haiwei Petrochemical, San Yuan Petrochemical, Satellite Chemical, Ju Zhengyuan, Zhongjing Petrochemical, Jineng Technology and other PDH route polypropylene companies all have polypropylene expansion plans. Will the somewhat unattainable propane price hold back the expansion of polypropylene capacity?

Will this increase the likelihood of a slowdown in construction and delays as companies such as Foreign Heng Chemical, Lihua Yi, Yong Rong Holdings and Baoniu Energy are building or proposing to build polypropylene projects from propane?

Through the extraction of resources such as ethylene and 1-butene, polypropylene companies that use propane as a source are no longer limited to producing homopolymer polypropylene. Companies represented by Donghua Energy, Ju Zhengyuan and Haiwei Petrochemical are adjusting and upgrading their product mix to random polypropylene and impact resistant polypropylene.

Other routes for epichlorohydrin and acrylonitrile?

Although polypropylene is the most important and largest consumption area downstream of propylene, acrylonitrile, propylene oxide, butyl alcohol and other downstream extension products are still more profitable, whether the original insistence on propane - propylene - polypropylene enterprises will open new roads, multi-point development? 

The future development of important companies such as Dong Hua Energy, Haiwei Petrochemical, San Yuan Petrochemical, Satellite Chemical, Ju Zheng Yuan, Zhong Jing Petrochemical, Jineng Technology and other important companies for investment is well worth watching, studying and comparing.